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Heat help

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rising costs strain low-income programs

By Bryan Marshall

As cool summer breezes turn to shivering winter air, some residents have begun turning the heat on in their homes.

In a down economic time, unfortunately, Kentuckians are expected to pay more for natural gas in the coming months than they did a year ago, according to the Kentucky Public Service Commission (PSC).

“High heating costs will again be a burden for many of our citizens,” PSC Chairman David Armstrong said. “Although the prices have come down since August, natural gas still costs more than it did at this time last year.”

On average, Kentucky customers can expect to pay about 17 percent more this year than last for the same quantity of natural gas.

About 44 percent of Kentuckians heat their homes with natural gas.

Wholesale costs, which account for the majority of natural gas bills during the heating season, have more than doubled since 2002.

By federal law, natural gas prices are not regulated at the wholesale level and fluctuate with supply and demand.

Gas companies are entitled to recover the wholesale cost of the gas delivered to customers, including the fees they pay to interstate pipelines to transport the gas to their retail distribution systems, under state law.

Kentucky’s five major natural gas distribution companies expect their wholesale cost this November to be, on average, $11.70 per 1,000 cubic feet (mcf), up $2.24 (24 percent) from an average of $9.46 per mcf a year ago.

But the November 2008 cost is well below the August 2008 average of $15.17 per mcf, according to the PSC.

Residents who heat with propane (10 percent) and fuel oil (3 percent) also will be paying more than a year ago.

The 39 percent of Kentuckians who use electric heat are expected to see the smallest increase in their energy bills this winter.

The Energy Information Administration predicts that home heating costs will rise 15 percent over last year, and cost the average family $1,137, said Jennifer Belisle, community services director for Northern Kentucky Community Action Commission.

The NKCAC’s neighborhood centers, including one in downtown Williamstown, began offering its annual energy assistance program last week.

The Low Income Home Energy Assistance Program (LIHEAP) is a federally-funded program to help eligible low income households meet their home heating and/or cooling needs.

The U.S. Department for Health and Human Services allocates funding to Kentucky through the Cabinet for Health and Family Services, which contracts with Community Action Agencies across the state to receive LIHEAP applications and provide recipient benefits.

“In 2007, we helped 644 Grant Co families with $74,038 in assistance,” Belisle said.

“For low-income families, heating costs are a higher portion of their monthly budget than the average family,” she said. “A high portion of low-income families are housing cost burdened, which means they pay more than a third of their monthly income for rent or mortgage payments and utilities.”

LIHEAP has two main components: Subsidy and crisis funding.

The subsidy component operates in November and December to help residents at or below 130 percent of the federal poverty level pay home home heating costs for which they are responsible either by direct payment of as an undesignated portion of their rent.

In addition to income guidelines, eligible applicants may not have liquid resources in excess of $1,500 except when a household member has a catastrophic illness, in which case applicants may have as much as $4,000 in liquid assets if those assets are used for medical and living expenses.

From 90,000 to 110,000 households each year benefit from home energy subsidy assistance.

“In our eight counties, we’ve already served about one-fourth of the total number of households served last year, and we’re still in the first week of the program,” Belisle said.

“Higher costs for gas, food and other basics are putting families in a bind, and they’re needing more assistance.”

The crisis component of LIHEAP operates from early January until the middle of March, or until all funds are expended.

Clients must meet the same criteria as the subsidy assistance and be in a crisis situation involving imminent loss of heating energy; have four or fewer days worth of fuel oil, propane, kerosene, wood or coal available; or, have received an eviction notice citing unpaid rent.

Gov. Steve Beshear announced in October that Kentucky will more than double the assistance it gives this year through the LIHEAP after Congress decided to increase funding for the heating crisis program.

Kentucky will receive more than $68 million in federal funds this year, more than double the anticipated $30 million Kentucky was to receive.

Last year, LIHEAP funds were distributed to nearly 174,000 Kentucky families.

An estimated 45,000 additional families needed help, but no funds remained in the program. With the increase in funding, it is estimated that up to 150,000 additional families will benefit from the assistance.

The NKCAC also offers assistance for home heating costs other than LIHEAP, Belisle said.

“We can also help with budget counseling and energy conservation counseling, so families can reduce heating costs and budget better for winter bills,” she said. “In addition, we can help some families who qualify with weatherization services to make the home more energy efficient, through measures like insulation, caulking and other repairs.”

To receive weatherization services, resident must complete an application and provide proof of income, information on all the residents in the home, a copy of their deed and the last 12 months’ utility bills. For renters, landlord permission must be obtained.

NKCAC staff weatherize the homes of about 120 families each year.

Families receive between $2,700 and $3,700 worth of work on their homes, which is determined by a thorough inspection and safety check of all energy systems.

When a home is weatherized, a family can expect an average savings of 15 percent of their energy bills.

For more information about LIHEAP or other services, go to www.nkcac.org or call 824-4768 or 824-6324.